The wintry grip on Oklahoma has sent natural gas prices in Oklahoma up to nearly $1,000 per million British thermal units.
Reports indicated the $999 MMBtu price was indicated for two contracts at the Oneok Gas Transportation hub in the state. It represented a 24,000% increase compared to a week earlier.
David Hoy, a trader at Dynasty Power in Calgary told Bloomberg the $999 compared to $4.19 last week.
Natural gas prices increased at other sites as well, but nothing as drastic as in Oklahoma. The Henry Hub in Louisiana, considered the benchmark for futures in New York traded at $19 after increasing to $30. A week ago, Henry Hub prices were $3.24.
Heating demand has been high since Oklahoma, Texas, Kansas and other Plains states were hit by Arctic weather. Rolling blackouts continue to hit Texas and Oklahoma experienced some on Tuesday. When the blackouts occur, the liquids freeze inside pipes and wells and processing plants are forced to shut.
“We had large power plants that went off line and can’t be brought back now,” said Brandy Wreath, the director of the Public Utility Division for the Oklahoma Corporation Commission. He made the comment Tuesday during an emergency meeting of the regulators to consider an order giving more leeway to power producers.
As Bloomberg quoted one gas trader, “It’s a shocking situation–it’s chaos–it’s crazy with the prices.”